Historically, those in need of human services were forced to rely upon private charities, religious organizations, philanthropists, and the munificence of the general population. The delivery of human services was thus a thoroughly decentralized operation carried out by private sector organizations that rarely collaborated with one another.
The shortcomings of complete reliance on the private sector became increasingly apparent by the early decades of the twentieth century. In response, the state governments undertook ambitious programs to administer the delivery of human services. Examples of such services include primary health care, substance abuse services, therapeutic childcare, and vocational rehabilitation programs. Today, the provision of human services is one of the most significant activities of the state government.
The vast majority of direct care and services are provided using taxpayers dollars that are contracted out from state and local government agencies to non-governmental, typically non-profit, organizations. Public employees render only a fraction of the human services delivered in a state. The state government's role is to provide funding and oversight of non-governmental organizations, entering into contractual relationships with local service-providers and to effectively manage those relationships.
A difficulty associated with the use of local service-providers is the need to manage the multitude of relationships that develop between the state's various agencies and the local service-providers. Managing these relationships includes, for example, selecting and entering into contracts with the local service-providers, ensuring that the terms of the contract are being complied with, ensuring that any reporting requirements are being met, handling invoicing on a timely basis, and conducting accurate audits of provider accounts and activities.
Nominally, a single entity, namely the state, is charged with managing the delivery of human services. As such, one would expect that the delivery of human services is no longer the chaotic and decentralized operation that it once was. One would expect that with a single entity assuming the entire management role, the entire delivery of human services would have become a highly centralized and efficient operation.
In practice, a state government includes many autonomous agencies that may not communicate with each other. These agencies may be large enough so that individual managers within those agencies likewise do not communicate with each other. As a result, different agencies will often contract with the same local service-provider without knowing it. In some cases, the same agency will maintain several contracts with the same local service-provider without knowing it. This arrangement breeds inefficiency by creating circumstances in which particular relationship management tasks are performed multiple times.
As an example, a first agency entering into a first contract with a local service-provider may require evidence of accreditation or licensing of that local service-provider. A second agency, which may be the same agency as the first agency, may then enter into a second contract with that local service-provider. While each agency may have legitimately different licensure or accreditation requirements, the local service-provider communicates separately and redundantly with both agencies. This separate and redundant communication also exists for other aspects of the relationships between the agencies and the local service-provider including, for example, contact management, invoicing and payment, and service reporting aspects of the relationships.
In another example, a first agency may enter into a first contract with a local service-provider to provide services at a first price. A second agency, unaware of the first contract, may enter into a second contract for the identical services at a higher price. In this case, because of its ignorance of the first contract, the second agency will have spent more than necessary to obtain the same services as the first agency.
In yet another example, a first agency may enter into a contract with a local service-provider without knowing that the same local service-provider delivered sub-standard services to a second agency. In this case, the first agency will either compromise its delivery of services or miss out on the opportunity to use the local service-provider's earlier performance to negotiate a better price from that local service-provider.